Epstein-Barr virus (EBV) nuclear protein 2 (EBNA-2) is essential for B cell transformation by the virus. The goal of this project is to determine the mechanism of B cell transformation by EBV. Injection of EBV-transformed human lymphocytes into SCID mice results in the appearance of fatal human B cell tumors containing EBV. Cell lines were developed that contained EBV mutants that were identical, except for different deletions in their EBV EBNA-2 gene. EBV mutants with deletions in the amino half of EBNA-2 had reduced transforming activity in vitro and produced tumors in mice more slowly, while a carboxy-terminal mutant had a transforming activity greater than or equal to wild-type virus and produced tumors more rapidly than wild-type. Therefore, EBNA-2 is important both for lymphocyte transformation in cell culture and B cell tumor growth in SCID mice. An EBV-transformed human B cell line, from one of the EBV mutants, was found to grow rapidly and widely disseminate in SCID mice. Analysis of these transformed cells isolated from mice showed a 1:18 chromosomal translocation and downregulation of the adhesion molecule, LFA-1A. These two abnormalities may be related to the increased tumorigenicity of this cell line. EBV EBNA-2 contains a domain that directly activates transcription; a 14 amino acid region possesses much of the transcriptional activity and is essential for transformation by EBV. A chimeric virus was constructed that contained a portion of the transcriptional activation domain from the herpes simplex virus VP16 inserted in place of the 14 amino acid region in EBNA-2. This chimeric virus was able to transform B lymphocytes and transactivate expression of EBV and B cell genes. Mutation of a single amino acid in the 14 amino acid domain of EBNA-2 abolished transcriptional activation and B cell transformation. Thus, transcriptional activation is required for EBV-induced B cell transformation.